eCommerce, Cities, and Sustainability

eCommerce can be key in helping cities meet their climate and sustainability goals

eCommerce will play a crucial part in helping cities achieve their climate and sustainability goals. Innovations in last mile delivery, packaging, and reverse logistics are sustainable, efficient, and convenient ways that eCommerce can make this happen. 

eCommerce, Cities, and Sustainability

Large cities are harnessing every ounce of manpower and brainpower to set and reach ambitious climate goals. This is especially true in the US, where climate goals can differ on city, state, and federal levels. Many of these goals revolve around decarbonizing existing transportation relied upon by citizens. While these initiatives will help cities reduce their carbon footprints, they ignore a significant, and growing piece of the puzzle, eCommerce

eCommerce has allowed consumers to get anything sent to their door in a matter of days or even hours. This expectation is not going anywhere, but the current practices that enable this are carbon-intensive and run counter to cities efforts to fight climate change. This leaves massive pain points for cities, companies, and consumers.

As an urban-dwelling generation of consumers comes of age and gains purchasing power, it expects brands to be as convenient and efficient as Amazon and as idealistic and principled as Patagonia. Thus, survival in eCommerce will depend on sustainable innovations in the supply chains as well as on a product-level. These innovations have the power to hook customers with their convenience and retain them with the knowledge that their dollars spent are going toward building a more sustainable future. The good news is that some of these innovations are already here, and many more will be achieved soon. Let's take a look at some of these areas that will be instrumental in achieving climate goals.   

Last-Mile Delivery

Last-mile delivery is the most expensive and carbon-intensive part of the delivery process. Luckily, it is also the leg that is the most primed for innovation through the alignment of automation and electrification in urban mobility. This alignment does not come down to more Teslas or charging stations, but by designing systems to make delivery more convenient for the consumer without increasing the carbon footprint of such an effort. 

Urban delivery is dominated by a growing number of delivery vans, most of them outdated. In 2019, the number of vans grew by 19% and that number is expected to keep growing [1]. Even if all of these vans were electric, they would still not be optimized for urban delivery. Cities would be better off with different modes of transit delivery that do a better job taking advantage of urban geographies. 

Take electric cargo bikes as an example. They have been successfully used by couriers like DHL in European cities for up to 70% of last mile deliveries [2]. They could play a huge role in US deliveries since they are faster, cheaper, and greener, and they also allow local shops to offer same day delivery to customers within a certain radius. UPS and Amazon recently have taken part in electric cargo bike pilot programs in New York City and Seattle. 

Sidewalk bots are another innovation in last mile delivery that can work in urban areas. They can help retailers deliver parcels in less dense urban neighborhoods, because they can navigate sidewalks either to leave a parcel or pick up a package at a front door. 

Then there are centrally located parcel lockers, which can be reached by any mode of transit. These one-stop shops reduce emissions since vehicles need to make fewer stops, and can be more convenient for city dwellers since they don’t have to time their day waiting for a delivery to arrive.

You don’t need the density of an urban downtown for tech to improve last-mile delivery. Drones can transform same-day delivery of small parcels where they have space to fly, providing on-demand delivery for all sizes of retailers.

And while all this tech works well with small to medium parcels, 2018 data shows that 41% of all last mile deliveries involved items too large for it to handle [3]. That’s why electric fleets are potentially the most powerful tool available to reduce emissions. While charging these fleets does produce emissions, the switch to electric will stop trillions of tons of carbon from entering the atmosphere.  

Packaging 

In the US, more than 80B cardboard boxes are used per year, and cardboard usage rose 9% during the pandemic. While some of this cardboard gets recycled or used for other purposes, most of it goes down a trash shoot on its way to a landfill. Single-use cardboard has a carbon footprint of 3.31 kg of carbon per ton of cardboard and according to a study by Zero Waste Europe and the University of Utrecht, reusable plastics crates produce 85% fewer emissions than single-use cardboard boxes [4,5].  

While single-use cardboard has been inherent to eCommerce since its inception, it is neither the most sustainable nor convenient way to pack orders, and its supremacy in deliveries is waning. Large retailers see reusable packaging as a part of their futures. Companies ranging from Clorox to Haagen Dazs are working on creating aluminium and stainless steel packaging that can be returned, cleaned and refilled for subsequent uses. Others are experimenting with selling consumers reusable totes or boxes and sending couriers to fill them when they place an order [6].  Walmart is expanding that concept to grocery delivery by offering customers temperature-controlled boxes that they can place on their doorstep to be filled and refilled when they place orders [7]. 

Reimagining what goes in the box is another area that packaging can be more convenient and sustainable. Both startups and established retailers are beginning to work with logistics providers to bundle different orders from different companies into one package, rather than have multiple orders delivered. 

Multiple-use packaging that can combine many orders in one box paired with a reverse logistics effort could be more convenient for consumers because they will no longer have to manage and monitor multiple single-use boxes that consume space in apartments and trash shoots. This effort will obviously help reduce the waste and the carbon footprint It also will shift supply chains to hyper-local radiuses rather than ones that cover a two-day shipping radius. 

Reverse Logistics 

The eCommerce supply chain starts with the click of a “buy” button and ends with a box delivered to a residence. This linear supply chain has been set in stone since the first online order, and all innovation in the eCommerce and supply chains have revolved around keeping it in place. In recent years, as the urgency of climate change has loomed larger in our collective consciousness, and as the size of the linear supply chain’s carbon footprint has been increasing and exposed, this thinking has begun to change. In order for cities to meet climate goals, we need to move from linear to reverse supply chains. 

Reverse supply chains and logistics -- the process of moving goods from their final destination for the purpose of capturing value or proper disposal -- have begun to gain momentum and become more prevalent in eCommerce. This mode of logistics is the foundation for and will be a critical piece in helping cities meet their sustainability goals.

Cities are perfectly positioned for reverse logistics to work. Their dense populations make it economically viable for enterprises to recapture value by regularly collecting materials and refilling orders. Reverse logistics also has the potential to shift some warehousing toward nano fulfillment and hyperlocal operations, rather than the traditional two-day shipping radius. This shift cuts costs as well as emissions, since goods don’t have to travel as far and even can be delivered to consumers by more sustainable means, such as ecargo bikes. By connecting all of these practices, eCommerce can help cities fight climate change. 

Thanks to Rachel Braun and Santosh Sankar for reviewing prior versions. 

  

Other Insights

Founders Camp is Back in 2021

Returning to the event circuit to help supply chain founders build and sell

May 18, 2021

Meet Katie, Our Operations Coordinator

Bringing operational, organizational, and execution prowess to the team

April 8, 2021

Dive into Startups and VC as Our Next Venture Fellow

Our next program starts July 1st

March 25, 2021